Mainesi Kalaula from Kachiwale Village, Traditional Authority (T/A) Kayembe in Dowa District is poorer than she was some years ago. Her dream to use milk business as tool for stamping out abject poverty at household level lies in tatters.
Kalaula and other dairy farmers in her village feel duped by a milk processor who until today has not paid for over 12 000 litres, the farmers supplied.
The 38-year-old woman purrs that her 16-year-old son failed to enroll at a nearby Simbi Community Day Secondary School (CDSS) all because she could not afford school fees and other basic necessities for the boy.
“My son’s colleagues who were selected together with him, are now in Form Four, he is at home,” she says.
Overall, the single parent is struggling to take care of six children and she told Business Review her desolate tale that life is simply unbearable as the pain from poverty is so excruciating.
She hugely blames her unrelenting woes on the Malawi Dairy Industries (MDI), a milk processor which she claims failed to pay milk revenues to Gondoli Milk Bulking Group (MBG) since 2011.
Kalaula belongs to Gondoli MBG and the group has 142 members (70 men and 72 women). The majority of the members share the tear-jerking tale of being tormented by poverty and have no purchasing power just like Kalaula.
Towards the end of last month [June], Business Review visited Kachiwale Village to appreciate the challenges and success stories of Gondoli MBG courtesy of Civil Society Agriculture Network (CisaNet) officials with funding from Heifer International.
But we were greeted by hopelessness, desperation and of course a stench of deep poverty which many members said was artificial poverty crated by milk processors.
Narrating their ordeal, Chimwemwe Gama, the group’s milk buyer, said they are unable to realise their dream as stipulated by their mission of changing the livelihood of the people in their area by selling milk on commercial level.
“By now, we should have grown into a big cooperative since our group was established 1987 with 56 members, but today we are even moving backwards as we only have 23 heads of cattle and 19 heads of local cattle, and you can see that they are not enough on average to cater for about 142 members,” Gama lamented.
He says just like Kalaula, most of bulking group members are having difficulties to send their children to school because of cash-flow problems the group is facing.
Gama adds that most of their dairy cattle are dying due to lack of proper medication and feed.
The group also lacks churns which would help them to take milk from the farm to the MBG cooling facilities simply because of cash-flow challenges.
Failure to pay farmers
Business Review had access to records detailing the failure by MDI, one of Malawi’s well-established milk processor, to pay the poverty-stricken Gondoli MBG.
The data showed that Gondoli MBG had religiously delivered 12 899 litres of milk to MDI in 2012, but shockingly not even a single tambala was given to Gondoli coffers until now.
Here is the whole breakdown: In February 2012, the MBG delivered 1 806 litres of milk, in August 2012 (2 344 litres), September 2012 (2070 litres), October 2012 (1 988 litres) and December 2012 (477 litres).
And according to the records, in 2013, despite not receiving any penny from MDI, the MBG continued to supply the milk to the company following a directive by the Central Region Milk Producers Association (Crempa) issued to Gondoli MBG to continue supplying milk to the milk buyer.
Records show that in February 2013, the struggling MBG delivered 284 litres of milk, September 2013 (1 171 litres), October 2013 (1 726 litres) and in November 2013 (945 litres).
But according to Business Review investigations, MDI had subcontracted another firm in 2013 to collect milk and pay the MBGs on their behalf.
The firm, our research shows, had also payment problems with Ntchisi-based Mpalo Dairy Farmers Cooperative as the later owed the cooperative over K8 million by October 2013.
Gondoli MBG chairperson Foster Banda, in an interview, said in total they delivered 8 685 litres of milk to MDI and 4 214 litres of milk to the subcontracted firm, which in total accumulated to 12 899 litres.
Efforts by the Gondoli dairy farmers have over the years yielded nothing as their national grouping, the Malawi Milk Producers Association (MMPA) has also failed to strike a positive deal between farmers and MDI, according to information we have gathered.
Approximately, the 12 899 litres that MDI collected from Gondoli milk farmers through the firm, could have earned the farmers in excess of K1.9 million, using the prevailing K145 per liter market price.
CisaNet, a local think-tank on agriculture notes, in a recent report that it is aware of the sufferings of farmers under Gondoli MBG. It says that delayed payment from milk processors has affected dairy farmers at national level.
CisaNet, through its dairy policy stakeholder engagement meetings it undertook in Dowa, Lilongwe and Mchinji, under its central dairy scale-up project, visited some organisations that are associated with promotion of dairy activities in the Central Region.
Among these organisations were processors, dairy farmer associations, academic institutions, non-governmental organisations (NGOs), donors and government departments.
“This [is] affecting the daily operations of the MBGs and the farmer at household level as dairy is considered a major income-generating activity,” CisaNet report says.
Response from MDI
When contacted for comment on Tuesday, MDI managing director Bob Dzombe refused to take responsibility of the debt and attributed it to the subcontracted firm.
“They are the ones who owe the farmers such money,” Dzombe said in a brief response.
Last week, Dzombe was on record as saying the debt was incurred by a different management that was running the company before he took over. He said his company now has a different arrangement with milk bulking groups.
MMPA national director Herbert Chagona on Tuesday said the association is aware that MDI owes the Dowa milk groups some money and that the issue has not been concluded.
Chagona said MMPA is aware that in 2013, MDI had subcontracted a firm to run the company’s factory operations and said “at first things started very well but in the end they had accumulated a lot of debt.
He said as an association, they have over the years been holding dialogues with farmers and the processor and confirmed that at some point the farmers threatened to conduct a vigil at MDI, but were told not to by the Lilongwe district commissioner (DC).
The livestock industry in Malawi contributes about 11 percent to the total gross domestic product (GDP) and about 40 percent of the value of total agricultural products.
Livestock provides food, income, manure, animal traction and social security.
There are about 1.4 million farm families who own one or more of various livestock types, 15 percent of all the livestock owners are commercial and the rest are subsistence.n